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Carmela Guerriero was raised with the 20-per-cent rule when it came to finances.

As a young woman, her parents encouraged her to put 20 percent of every pay cheque she earned into an account where she could save and invest for the future.

“That automatic savings plan was invoked in me from my very first job,” says Guerriero. “I learned the benefit of compounding at a young age, and have been very grateful for that lesson ever since.”

Guerriero, now Quebec regional vice president, Estate and Trust Services at RBC Wealth Management, is helping other young women and families learn about saving, spending and investing for the future.

She says the advice is particularly important for women, whose investment needs can be quite different from men, especially given their changing roles in society.

Not only are women living longer than men, which means their retirement portfolio needs to last longer, but more are also becoming the leading or sole breadwinner in today’s modern family.

More women are also graduating from university and college; and a growing number are starting their own businesses compared to years’ past. Each achievement requires different financial planning needs than perhaps their mothers or grandmothers had at the same stage in life decades earlier.

Many women are also marrying later, if at all, which means having to support themselves financially, instead of relying on a spouse to share expenses.

Despite theses new financial realities for the female population today, too few women are developing a plan to grow and protect their wealth, Guerriero says.

“If having a career, family and comfortable retirement are important to women, they need to sit down with a trusted advisor and map out what they need to do next,” she says. “That should start at an early age. The younger they start, the better.”

Where to start?

When women walk into her office for the first time, Abby Kassar usually offers a well known, but not often followed piece of advice.

“It’s not how much you make that’s important, it’s how you manage that money that’s important,” says Kassar, vice president, High Net Worth Planning Services at RBC Wealth Management.

It’s sound advice for any young woman – or man – looking to set a foundation of good financial habits.

“If they start early on with good habits, in terms of money management, they’ll have a good foundation as they grow older and life gets more complicated,” Kassar says.

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Women are good planners, but Kassar says they may be intimidated — just as some men are — by the vast amount of financial information available, especially if their careers are focused on different skills.

“It’s important for women to get a good understanding of what assets they have and expect to receive, and to work with trusted advisors who can provide them with the resources they need to gain financial knowledge,” Kassar says.

That includes saving and investing, but also life, health and living benefits products and an estate plan to protect their financial future, and that of their loved ones. Young people in particular tend to put off buying insurance or writing a will, believing they won’t need it until well into the future.

“It’s not something most young people consider, but it’s important at any age of adulthood,” says Kassar.

Start early, perform financial check ups along the way

Leanne Kaufman, head of Estate and Trust Services, RBC Wealth Management, had a curiosity for banking at an early age.

She remembers playing with her parents’ old cheque books as a kid, for fun.

“I would pretend I was running my own little business. I would write myself cheques and ask my parents to sign them,” she recalls with a laugh.

That early, albeit pretend, exposure to bookkeeping and balancing chequebooks helped Kaufman develop a strong appreciation for saving and spending money.

“There was always frugality at the heart of it. My parents grew up in an environment where nothing was wasted,” Kaufman says.

Her parents also made sure she started saving early, including setting her up with a Registered Retirement Savings Plan (RRSP) starting at age 18, using money she earned from part-time jobs.

Saving and investing early can be a critical way to set one up for long-term financial success, but Kaufman stresses the importance of always revisiting your financial roadmap as your circumstances in life change.

“You can’t set it and forget it,” says Kaufman.

“There are certain life events — whether it’s a career change, marriage or child — where you need to go back and assess your plan.

That may also include a woman who gets divorced and has to adjust to the higher cost of living alone. She will need to ensure her wealth plan has set her up with the cash flow she needs in order to maintain her lifestyle. .

More women are also choosing to live alone at various stages in life, without feeling the need to rely on a spouse for financial support.

“There is a lot more financial independence for women today,” Kaufman says.

She says a good financial planner, alongside an accountant, lawyer and other wealth management professionals, can help women build and protect their retirement portfolio, making sure their goals remain on track as circumstances change.

Susannah Musselman, vice president, financial planning specialist at RBC Wealth Management Services, says she wishes she had saved more money when she was younger. It would have provided her more of a financial cushion when she took time off to have children.

“I would coach young women today to save as much as they can in a RRSP,” she says. “It can be a very effective tool not just for retirement, but during your lifetime. You can borrow against it to pay for a house or use it for the Lifelong Learning Plan,” to finance full-time training or education for yourself, or a spouse. “It’s very efficient as an emergency fund,” she says.

Musselman often finds herself recommending women move into a broader range of investments to build their retirement nest egg.

“It’s important to understand the role that different types of investments play in an overall strategy,” Musselman says. “You want to make sure that you are earning enough from them, on an after tax basis, so you don’t outlive your money.”

Of course that also means setting aside more money along the way, in tax-efficient vehicles like a RRSP or a Tax-Free Savings Account.

It also means living within your means.

Musselman has worked on budgets with many clients who come out of the process surprised at their rate of spending.

“Once you understand where your money is going, then you can be more conscious of what to do with it,” she says.

Leave room for charitable giving

Many women also want to use their wealth to give back to others. According to Statistics Canada data, women are more likely than men to donate to charity, in particular to health care related causes or to religious organizations.

Being more charitable is something Guerriero is teaching her young daughter, alongside the importance of saving early.

Guerriero has set up three jars for her daughter to divvy up her allowance each week; one for saving, one for spending and one for charitable causes.

“She has to decide how much to put in each jar, but each jar has to get something when she gets her allowance,” Guerriero says.

Guerriero is thankful for the lessons she learned about money as a young woman, and hopes her daughter will grow up with the similar values around saving, spending and sharing wealth.